Cashing in on capacity. (treasury management)(Editorial)

If cash is king, the kingdom isn't what it used to be. Indeed, the value of cash over the past 20 years can be seen as a tide that rose during 1970s and most of the 1980s, then ebbed in the late 1980s and early 1990s. Roughly speaking, the fortunes of corporate treasury managers have risen and fallen with that tide.

Is the value of treasury management equivalent to the value of cash? Obviously, the linkage was more fun on the up side; during the now-mature downside, treasury managers have labored mightily to break the perceived equation and establish their value to the corporation as more than cash flow enhancers.

Most opportunistically, they have tried to find a strategic role as agents of the lean, mean operating efficiency that brings global competitiveness and as builders trading partner relationships that please customers and increase sales.

Financial performance today clearly feeds off commercial performance - the profitable production and sale of products and services - rather than the legerdemain of financial engineering and deal-making. In all candor, we probably should, in 1996, start referring to "Wall Road."

Top honors today go to the players who score points in the commercial arena. That certainly has become the big show, the main event.

Treasury managers have been able to get in a few good minutes off the bench, following tactics that have been amply reported on these pages - financial EDI, working capital management, supply chain management within the payments process, efficient automation and outsourcing of treasury operations, and cost management.

Jim Sagner's cover story on page 12 of this issue is a telling example: The cash manager makes himself useful as an assistant cost manager, volunteering his cash forecasting skills to help the company refine the projections on which it will base strategic commercial decisions.